Risk Management for Churches and the Kingdom of God

Risk Management for Churches and the Kingdom of God

The Kingdom of God moves and grows forcefully throughout the world. The blood of the martyrs testifies to the spiritual battles that have been waged throughout the annals of time towards the church. The ecclesia has been given the charge to go and make disciples of all nations. With this charge comes the task of shining light into the darkness, spreading truth where there is falsehood and sharing hope where there is none. As a result, there will be loss, there will be hurt and there will be pain. The church cannot avoid these realities, but it can take steps to lessen the impact’s frequency and the severity of the losses it has to deal with. This is where the practice of risk management for the local church comes into play.

Throughout my many years of working in the arena of church insurance, the pastors and lay leaders that I converse with do not seem to get quite as excited about risk management as I do. I can understand that. Amongst all of the issues, ideas, programs and growth strategies being presented to the local church today, risk management isn’t very “exciting,” for lack of a better term. However, its lack of appeal does not lessen its importance. The number of claims for embezzlement, sexual misconduct, arson and counseling has not decreased in frequency and severity over the last two decades. The church operates in a fallen world, inhabited by depraved individuals who carry out sinful acts. Creation groans and the wind, the waves and the skies wreak havoc upon the earth and the structures built upon it. There is loss.

However, I have learned that if a church addresses the five following areas of risk management, they will go a long way in protecting themselves from losses which will cost them time, money and manpower to address. This, in turn, takes time away from doing the kingdom work God has called them to carry out.

1. Property Mangement

The area of Property Management or what I refer to as light bulbs, concrete, handrails and shrubs. The insurance company I work with has a loss control department which sends out loss control representatives to inspect the properties it insures. Inevitably, the majority of the inspection reports which are completed will include the need for a church to change burned out light bulbs, fix uneven concrete, install a handrail or trim some shrubs. These issues require a relatively simple fix; however, they are the most often neglected. The most effective way I have found to address these issues is to take a short and long term approach to property management.

With the “short term” approach, equip either a custodian or a retired lay person with weekly checklists to be completed based upon physical observation of the premises. In addition, provide the individual with the tools, equipment and money necessary in order to correct any problems uncovered from their inspection.

Often, your church insurance provider will have sample checklists that they will provide to you for free.

With the “long term” approach, capital budgeting must enter the picture. Proverbs 6:6-8 says, “Go to the ant you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet is stores its provisions in summer and gathers its food at harvest.” Sooner or later the church is going to face the cost of taking care of a big ticket item such as replacing a roof or updating heating and cooling equipment. Having the funds in place, to address these issues at the proper time, will help the church avoid more costly and time consuming problems.

2. Financial Controls

The area of Financial Controls or what I call, “money, money everywhere but not a cent to spare.” Malachi 3:10 says, “Bring the whole tithe into the storehouse, that there may be food in my house …” I believe we can draw from this verse that there is a stewardship involved with regard to the handling of money given to the church. “That there may be food in my house,” carrys with it the idea that the provisions given to the church are there for a specific reason and they should be watched over and protected. Often, protection of the funds given to the church comes down to instituting five simple procedures.

First, apply the “rule of two” to all financial transactions. This rule teaches that once an individual has handled two elements of a financial transaction, then someone else should take over and handle the monies or securities involved in the transaction. Second, require multiple signatures on checks which exceed a specified amount of money. The specified amount will vary based upon the average daily operating needs of the church. Once the amount is settled on by the appropriate leaders, it should be recorded in a policies and procedures manual for reference and protection. Third, have a strong working relationship with the local financial institution where the church does its banking. Let your bank know who is authorized to enact financial transactions on behalf of the church, the limit for which a check, other than payroll, is allowed to be drawn upon the church’s accounts, and who the bank should contact regarding any discrepancies that arise with the accounts. Fourth, require passwords to be entered onto computer systems before someone can access financial information and records stored in the system. Change the passwords every 90 days or when an individual who had access to the accounts is no longer serving in a capacity for which they would need access to church financial records. Last, at minimum, have an audit completed on the church books annually, by someone qualified and trustworthy, who does not work with the church’s financial records at any other time preceding the audit.

3. Liability

The area of Liability or what I call, “Which way do I go, George?” 1 Peter 5:8 says, “Be self controlled and alert; your enemy the devil prowls around like a roaring lion looking for someone to devour.” While property losses can disrupt the flow of a church’s kingdom work, liability losses can severely impair or shut down the work all together. The emotional fallout from claims which occur in this area of risk for the church is immeasurable.

I have learned that if an insured can remember the acronym “RPP,” they can avoid many of the hazards associated with liability type claims. “RPP” stands for “Reasonably Prudent Person.” This acronym is derived from the legal theory of negligence, which defined is, “the failure to exercise the degree of care that a reasonably prudent person would have exercised under similar circumstances to avoid harming another person or entity.” If a church leader is considering taking an action, such as salting icy sidewalks, or in a youth activity taking the group to play paintball, the leader should ask him or herself, what safety precautions a “reasonably prudent person” would take given this particular risk. Asking and responding appropriately to this question can help a church protect itself from many potential liability claims and will provide the church a measure of defense, should a lawsuit arise as a result of an injury.

A good scripture verse to apply to this area of risk is 1 Corinthians 10:23-24 which says, “Everything is permissible, but not everything is beneficial. Everything is permissible but not everything is constructive. Nobody should seek his own good, but the good of others.” Many times my church clients will call me and share information about an event or activity they are considering doing. Almost always, the first thing they ask me is, “Is it covered?” However, before my client asks me, “Is it covered,” I suggest that they ask themselves, “Is it good?” The order of asking these two questions can save the body of Christ much pain, loss and suffering.

4. People

The area of People or what I call, “I love the world; it’s people I can’t stand.” Warren Wiersbe said, “When you minister to the sheep, you must remember that sheep bite.” The flock of God is made up of individuals from all walks of life and at all different stages in their spiritual development. Ministering to such a diverse body of believers requires that the church has a solid foundation of operating documents and procedures.

In my opinion, there are three specific documents which every church should have in printed or readable form with easy access to these forms by anyone. First, there is the church constitution. This document tells the world who you are, when you came into being, and what you believe. Second, there is the church bylaws. The bylaws spell out how the church acts, when they meet, and how processes and procedures are handled within the body. Third, there should be a policies and procedures manual. This manual should address issues such as hiring and firing of employees, employee benefits, the role of lay people in the church, how they are expected to function within the positions for which they are serving, and other general matters pertaining to the functioning of individuals within the body of believers.

An acronym to remember which can help a church function properly in this specific area is derived from the word “truth” and goes as follows:

T—Treat everyone the sameR—Remember to always make decisions with the whole flock in mindU—Use resources that others have put together and made availableT—Teach about who you are, what you believe and how you operateH—Hold people accountable for the positions they hold, both paid and volunteer

5. Church Security

The area of Church Security or what I call, “Pop goes the Weasel.” One of the versions of the nursery rhyme, “Pop goes the Weasel,” goes like this.

Round and round the mulberry bush, the monkey chased the weasel. The monkey stopped to pull up his socks and “Pop goes the weasel.”

You kind of get the idea that when the monkey stopped to pull up his socks, the weasel took him by surprise and did him harm. Unfortunately, this rhyme is representative of what is happening today in the area of church ministry. The church is running along carrying out its biblical mandate when unsuspectingly, an act of violence pops up and catches everyone off guard. Sadly, there continues to be an increase in the number of violent acts being carried out towards the local church. As a result of this increase, it is more important than ever for the church to address and develop a plan of church security.

I have discovered, in talking with my church clients, that they are generally aware of the need to address the topic of church security; however, they do not know where to start. In order to help give my clients a starting point for addressing this area within the church, I have developed an acronym using the word “CAPE.” This usage is derived from the idea that the local church needs to throw a cape of protection around its attendees. The acronym goes as follows and provides a starting framework for the church to use:

C – Communication: No matter what size ministry you are, it is essential that you have a communication plan in place in the event that an actual or potential act of violence presents itself.

A – Assess: No matter what size property or buildings you are overseeing, it is essential that you assess the easiest points of entry and exit, from both the attendees and the perpetrator’s perspective.

P – People: No matter what the size of your staff or attendance, locate individuals with a burden and capacity for serving in the area of church security.

E – Education: No matter how simple or complex your ministry security plan may be, all levels of individuals involved in your ministry must be educated as to how the plan works.

When people come to church, they come to worship God in the sanctuary. The very word “sanctuary” carries with it the meaning of safety, a place to go to worship, learn and reconnect with the Creator. While is it impossible for church leaders to protect their flock from all of the risks that the church will face, it is not impossible for the leaders to lessen the frequency and severity of them upon the local church. As God’s Kingdom marches forward through time, it is my prayer that all that can be done is done, in order to protect God’s warriors from the attacks that will be waged against the “called out ones.” “Be alert; your enemy prowls around looking for someone to devour.” Knowing that the church has such an enemy, let us be diligent, ever vigilant and watchful. The sheep of the flock are counting on us.

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Roy has been working in the insurance business for twenty-seven years. Most of that time he has been serving churches and related ministries in the state of Indiana. He is with the American Church Group of independent insurance agents and agencies.
One of Roy's main goals is to provide insurance and risk management tools. These tools allow churches to carry out their Kingdom building activities safely and securely.
He is a Certified Insurance Counselor and an Associate in Risk Management. Roy is a graduate of Cedarville College and Trinity Evangelical Divinity School.